2017 Payments Monitor

CEO's
Corner

New brand, new premises

In June, we were delighted to unveil our new brand identity to support the positioning of Australian Payments Network.

Building on the company’s purpose, our new logo and strapline reflect our commitment to representing a network of systems and people, and reinforce our role in driving collaboration and cross-industry innovation.

The new branding has been applied to our new home at Barangaroo, which was designed to reflect our brand values. The new premises offer space for collaboration, and the new way of working has already been a source of inspiration for the team and our members.

I have been genuinely excited to see the type of innovation that has accompanied our repositioning:

partnering with industry and government, we introduced open loop payments for public transport, piloting since early July.

we are responding to the increasingly global nature of payments, convening the ISO group on emerging technology, and contributing to Standards Australia’s foundational work on blockchain.

The initiative kicked-off with the major financial institutions and NSW Police in December 2016. Notable progress has been made leading to significant improvements in turnaround times. We are now working with law enforcement agencies in other states and more financial institutions to expand the initiative across the country.

Importantly, this work aligns with, and supports the current nationwide trend for governments to digitise services and internal processes.

Industry
News

Open-loop Transport NSW, Manly Ferry Trial

AusPayNet is supporting the Contactless Transport Payments trial launched by Transport NSW on 6 July 2017.

Commuters travelling on Sydney’s Manly ferry are now able to use their contactless payment cards (or devices, such as a smart phone or wearable) to pay for their trips. Rather than an Opal card, they can use their own card to pay for transit in the same way they make other purchases with their contactless debit or credit card. This is expected to be particularly convenient for the myriad of tourists that travel the Manly/Circular Quay route.

AusPayNet has been instrumental in developing the first version of the framework for “open-loop” transit, in partnership with Transport NSW for the trial. We are now developing a second version, which will be an Australia-wide framework, for use by other transport authorities.

Industry
News

Australians are embracing digital payments

AusPayNet has released Milestones Reports twice-yearly since 2012 as part of its role in monitoring the decline of cheques.

The latest report released in May 2017, shows that the digital economy is accelerating the decline in cash and cheque use. Cheques plunged 20% in 2016, the largest drop ever recorded. Australia is also becoming a less-cash society, with ATM withdrawals down in both volume and value. Over the last five-years, the number of ATM withdrawals has dropped by 22%.

The 2016 Consumer Payments Survey released by the RBA on 24 July provides further insights into consumers’ changing behaviour. In 2016, cash accounted for 37% of consumer payments, down from 69% in 2007. Interestingly, the median value of cash held by the average person is now $40, and only 45% of us “top-up” cash from an ATM or at point-of-sale on a weekly basis (86% in 2007).

In comparison, card payments now represent 52% of all card payments by volume (26% in 2007), and about 66% of card payments at point-of-sale are now contactless.

Read the Milestones Report May 2017 here, and the RBA’s consumer survey here.

Industry
News

Australian Payments Council - Hackathon

AusPayNet is supporting the Australian Payments Council’s hackathon. This event will help uncover which data sets are useful for Australians, as well as some of the key questions relating to privacy and security that go hand-in-hand with data.

Up to 200 participants will be invited to Improve the Lives of Australians with data from some of the country’s most prominent financial institutions.

During the hackathon, participants will have access to data within a controlled environment (‘sandbox’) to bring their ideas to life. The sandbox, provided by the Open Bank Project, contains test data which emulate real transactions, and offers more than 130 standard banking APIs to access these data.

The hackathon will be held simultaneously at Stone & Chalk in Sydney and Cognizant’s Collaboratory in Melbourne on 11 -13 August 2017. To register, visit the website.

Regulatory
Round-up

Black Economy Taskforce

In December 2016, the Australian Government announced the establishment of a taskforce to investigate the role of the black economy in Australia.

One of the focus areas of the interim report, released to coincide with the 2017-18 Budget, is the role of cash in the black economy. The report looks at emerging digital trends such as mobile payments and biometrics and suggests that these can play a positive role in bringing greater levels of traceability to the economy. An additional follow-up consultation paper was released in early August, which contained a number of policy ideas for consideration.

The taskforce is investigating ways to encourage more businesses to move away from cash, including tax incentives for small business to move off cash, the role of crypto-currencies, and the potential for a ceiling on cash payments. The final report is due to be provided to Government in October 2017.

Regulatory
Round-up

2017/18 Budget and industry implications

The 2017-18 Budget was delivered by Treasurer Scott Morrison on 9 May. This year’s budget contained a number of measures that will impact the financial services sector in general, and the payments industry in particular. Notably, the Government announced a major new levy on some of Australia’s banks, which is projected to raise $6.2bn over the next four years.

In addition to the levy, the budget also contained announcements on open banking and digital identity. Treasurer Morrison announced $1.2m funding for Treasury to undertake an independent review into the best approach to implement open banking in Australia. More information is provided in the “Open data government inquiries ” article below.

The Government will provide $22.7 million in 2017-18 to complete the next stage of development for GovPass. The program will provide a trusted digital identity framework for use by people needing to provide secure proof of identity to use Government services online. In the future, this is expected to expand to be used by businesses.

For more on the Budget night announcements and their implications for the payments industry see our blog post
here.

Regulatory
Round-up

Data availability and Open Banking inquiries

Over the course of the last year, two separate inquiries have examined the issue of open banking and data availability.

A review of the banking sector by the House of Representatives Economics Committee recommended the introduction of an open banking regime (the Coleman Report). The Australian Government published a response to the Coleman Report in May announcing that it would adopt most of the Report’s recommendations, and asked Treasury to conduct an independent review into implementation. In mid-August, Treasury followed up with an issues paper for consultation in order to make recommendations to the Treasurer on the most appropriate model, regulatory framework, roadmap and timetable for open banking in Australia.

Simultaneously, the Productivity Commission undertook an inquiry into Data Availability and Use – in its Final Report recommending that government adopt an economy-wide data mandate. Government has not yet published a response to the Recommendations of the Productivity Commission Report. A cross-agency taskforce is currently coordinating the development of the response.

Upcoming

Members and industry events

Update on NPP and Osko

We are holding a member event at AusPayNet on 18 August 2017. NPP Australia CEO, Adrian Lovney and BPAY CEO John Banfield will be providing an update on NPP developments including the first overlay service Osko. Members are invited to register by 9 August 2017.

Sibos 2017 Toronto

Our CEO, Leila Fourie will take part in SIBOS’s panel “Complementary or competitive? The role of payments market infrastructures and correspondent banks in instant international payments“ on 17 October. Visit SWIFT for further details.

Women in Payments

Women in Payments is holding a Symposium in Sydney on 21 November 2017. Leila Fourie, is a confirmed keynote speaker. More details soon.

Digital
Marketing

Let us know what you think

AusPayNet is now on Twitter @AusPayNet . We invite our members, stakeholders and anyone with an interest in payments to follow us and join in the conversation. We’re also on LinkedIn – and don’t forget our blog.

CEO's
Corner

Australian Payments Network Limited - a new name

The start to our 25th year as the home of industry collaboration has certainly had a steady momentum! I’m hopeful that news of our new name has reached our entire readership, and that as the Australian Payments Network, we will continue to inspire innovation across our whole community.

Over the past months, we have worked closely with representatives from a cross-section of member and stakeholder organisations to reflect on our purpose and role, and to consider how these have changed over time. We’ve thought about how our purpose has evolved from managing the day-to-day operation of clearing systems, which was our primary function as the “Australian Payments Clearing Association”. This name was both descriptive and accurate, but the world of payments has changed significantly, as has our role.

Today, we are the home for collaboration and cross-industry innovation. We play an important role in driving continuous improvement, bringing together members and a growing number of new stakeholders. Moreover, in our role as champion of the payments system - as the defender as well as the promoter - we help the payments network thrive. The importance of the network - both in terms of the payments network and the network of people and members that are key to our success - inspired the choice of our new name.

Of course, a new name is only part of our repositioning. Later this month we will launch our new brand identity and logo, together with a new website that will offer our community a fresh look at the way we are working to help payments thrive.

The launch of our new identity has been planned to coincide with our move to new premises in Barangaroo, Sydney. We are busy planning a range of events, and I look forward to providing more details on these soon and to welcoming you to our new home.

Industry
News

Board Updates

In February 2017, we welcomed Ms Michelle McPhee as a new director to the Board. Ms McPhee is the newly appointed Head of Banking at the Reserve Bank of Australia (RBA).

Ms McPhee replaces Mr Lindsay Boulton, who resigned from the Board following his appointment as RBA Assistant Governor (Business Services). During his four years on the Board, Mr Boulton served on the Audit, Risk and Finance Committee, the Nomination Committee, and the Remuneration Committee. We thank him for his significant contribution.

Industry
News

ICPACE 2017

We were pleased to play host to the annual International Council of Payment Association Chief Executives (ICPACE) meeting in February.

ICPACE brings together the CEOs of payment associations from around the world to share insights and best practice. In addition to Australia, this year’s meeting included representatives from Canada, The Netherlands, New Zealand, South Africa, UK and US.

In this period of rapid change, it is important for industry bodies to work closely together and the CEOs discussed a range of topics, from the increased globalisation of payments, to strategies for supporting innovation and working with new market entrants. If you are interested in finding out more about the approaches of our member countries, please get in touch.

Industry
News

Open Data

In March, we were delighted to welcome David Beardmore, Commercial Director of the Open Banking Institute (ODI) to lead a discussion on open data. The ODI was a key contributor to the UK’s Open Banking Standard and David shared important insights from the UK’s experience to date.

David’s insights covered a range of topics from the complexity of classifying different types of data, to the requirement for education programs that ensure consumers and businesses have the right level of information about data sharing.

David used the data spectrum to help us think about different types of data.

If you would like a copy of David’s presentation, please get in touch.

Industry
News

ISO/TC 307 Blockchain and Electronic Distributed Ledger Technologies

During the first week of April 2017, our Emerging Technology Lead, Nick Cliff, took part in the first meeting of the international technical committee on standards. The ISO/TC 307 Blockchain and electronic distributed ledger technologies met at the International Convention (ICC), Sydney. Around 100 delegates from the 17 participating and observing countries worked to explore the future of blockchain technology via an International Standard.

Back in September 2016, the International Organization for Standardization (ISO) approved Standards Australia’s proposal for the establishment of international standards on blockchain. In its role as leader of this committee, Standards Australia will help guide the future direction of international standards to support the roll-out of blockchain technology.

At this first meeting, the formalities for the formation of a new ISO technical committee were carried out. A cross section of industry experts, consumer associations, along with government and non-government representatives made up an informed International Committee. A skillful Chair, Mr Craig Dunn, helped in navigating the range of opinions presented to arrive at creating several Study Groups.

The streams where Study Groups have been established are:

Reference architecture, taxonomy and ontology

Security and privacy

Identity

Use Cases

Smart contracts

Additionally, the committee identified that work may be necessary in future in the areas of terminology, governance and interoperability, with terminology being treated as a priority by the committee.

The Study Groups will be left to scope their topics, with Nick’s continued involvement focussed on the identity stream. Contributing to the development of standards for the payments system forms an important part of our role as an industry association and we look forward to helping industry participate in the shaping of this emerging technology.

The next meeting for the technical committee is due to be held in six months’ time, in Japan. If you would like more information about our contribution to the identity Study Group, please get in touch.

International
Industry News

Faster Payments Developments Overseas

In the UK, US and Europe, developments in the faster payments space are underway.

HSBC and Starling Bank have joined four other major UK banks in offering Vocalink’s Pay by Bank service so their customers can pay merchants online using the Pay by Bank app. The Clearing House in the US is rolling out a real-time B2B service, due to go live by the end of 2017. In Europe, the technology company DH Corporation is now offering a simulation testing environment for payment service providers planning to participate in the SEPA Instant Credit Transfer scheme, also due to launch by the end of the year.

Regulatory
Round-up

Black Economy Taskforce

The Australian Government established a Black Economy Taskforce, in late 2016. The Taskforce is investigating economic activity outside the formal tax system, including deliberate misreporting of tax liabilities. As part of its scope, the taskforce is considering the role of cash in the economy.

An interim consultation draft was released on 9 May 2017. The draft report contained a number of findings and recommendations relevant to payments. The Taskforce is continuing consultation, and Australia Payments Network is participating.

Regulatory
Round-up

DTA Digital Identity Scheme – Govpass

The Australian Government’s Digital Transformation Agency (DTA) recently announced the Govpass project.

In 2018, when the system is expected to be in full operation, a user will be able to prove their identity using pre-authorised third parties.

The project includes standards for accreditation, an identity exchange, and a single Commonwealth identity. The DTA anticipates that a range of government agencies at Commonwealth and State level, as well as third-party providers (banks included) will unite in this model.